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10 <br />moved aggressively, replacing all of the senior project management, and instituting more <br />rigorous accounting and human resom'ces policies, procedures, and practices. <br />Nevertheless, we recognized that our accounting and management failures had generated <br />substantial negative publicity in the state and reflected poorly on the successes of the landmark <br />W-2 program. In a gesture of goodwill and our commitment to the Milwaukee community, <br />MAXIMUS contributed an additional $SOQ000 to community-based organizations in Milwaukee <br />that provide services to program participants. <br />MAXIMUS is proud that in the years and audits occurring since the ?000-?001 timeframe, there <br />has not been a single questioned or unallowable cost identified. MAXIMUS remains a strong <br />partner with the State and,just Chis past Fall won the re-bid of the contract we have operated since <br />1998 in Milwaukee. As a further- demonstration of the confidence that our client has placed in <br />us, MAXIMiJS was also awarded a contract to operate yeC another region in Milwaukee. It's a <br />testament to our commitment to quality and our commitment to our clients that we were able to <br />overcome our difficulties in Wisconsin, and today we are doing more work in the State than we <br />were five years ago. <br />New York <br />During the same time period that MAXIMUS was the subject of press scrutiny in Wisconsin, the <br />Company was awarded two contracts by the New York City Human Resources Administration to <br />provide welfare-to-work contracts in New York City, iJnder State law, these contracts and those <br />awarded to other vendors, had to be registered by the City's Comptroller, The City's Comptroller <br />refused to register the MAXIMUS contracts, alleging improprieties in the procurement process <br />and in the Company's conduct, <br />The Comptroller- made several allegations including that MAXIMUS had inappropriately <br />interfered with the procurement process and had inappropriate access to agency officials. These <br />allegations also resulted in substantial negative press. Mayor Rudy Giuliani was supportive of <br />the procurement and argued strongly that the MAXIMUS contracts be registered. The Mayor <br />sued the Comptroller to force the registration of the contracts. After a protracted legal battle, the <br />New York Supreme Court Appellate Division held that the Comptroller was required to register <br />the contracts. <br />Significantly, the court found Chat there was no evidence that MAXIMUS was afforded <br />unfair access to Che agency and interfered with the procurement. The courC also indicated that <br />Comptroller had overstepped his authority in refusing to register the contracts. <br />This matter was also investigated by certain governmental agencies. The District Attorney's <br />Office of New York County and the United States Attorney's Office for- the Southern District of <br />New York, in response to requests made by the Comptroller, announced that they were <br />investigating the facts underlying Yhis matter. MAXIMUS steadfastly maintained that its actions <br />were lawful and appropriate and cooperated fully with the governmental reviews of the matter. <br />I~f~F`~i~~P~J~~..~S <br />